Alright, so I couldn't wait.
Parts list:
1x Grayhill 61C11-01-08-02 (32-position optical encoder w/switch)
1x Spiffy aluminum knob for the encoder
3x 10kOhm resistors (pull-up; one for each output + switch)
1x PC Parallel port + mating d-sub plug
various connectors, pieces of a CAT-5 cable, solder + burned fingers, etc.
So, I'm using a variant of the circuit shown on the 2nd page of
this PDF document.
For +5V, I'll be using a GPO off of my (soon to be had) Matrix Orbital VK204-25 display, since it'll be right next to the encoder.
For the data acquisition, I'll be writing a small C program to (for now) poll the parallel port. Since the encoder almost always has at least one of its outputs high, I don't think an interrupt-driven scheme will work here - would *constant* interrupt servicing be any better than polling?
FYI, most of the daemons I'll be writing for this project will be in perl, with C for the speed-critical stuff.
Circuit diagram + more info to come.